Gold Price Struggles as Technical Resistance Holds
Gold Price News and Analysis
- Gold unable to breach the 200-day moving average.
- A new 2018 low may be made in the short-term.
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The latest IG Retail Sentiment Indicatorshows that traders are nearly 79% net-long of the precious metal, yet recent changes in net-longs give a mixed trading bias.
Gold Price May Fade Lower
The spot price of gold is having difficulty trading back above the 200-day moving average, currently around $1,308/oz, despite other safe-haven assets getting a strong bid on the ongoing political turmoil in Italy. US Treasury yields have also been driven lower as investors shun risk, a situation that would normally see gold moving higher, yet price action is flat on the day. While the situation in Italy may calm over the next few days, in Spain there will be a vote of no-confidence in Prime Minister Mariano Rajoy on Friday. Rajoy who has ruled Spain since 2011 is under pressure after 29 people linked to his People’s Party were convicted of a series of crimes last week.
The long-term moving average, which provided support in the first two weeks of May has now turned into a strong resistance level and will need to be broken decisively if gold is to push ahead. A break above would leave $1,316 as the next upside target.
Gold currently trades just below the 50% Fibonacci retracement ($1,301.4/oz) of the December -January 2018 rally and is currently eyeing this year’s low at $1,281, around $5 below the 61.8% Fibonacci retracement at $1,286/oz.
Gold Spot Price Chart Daily Time Frame (September 6, 2017 – May 29, 2018)
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--- Written by Nick Cawley, Analyst
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.